Tupperware profits stack up

Tupperware Brands Corp. had a relatively strong fourth quarter but expects more challenges in the year ahead, according to an earnings report it released Tuesday night.

The Kissimmee-based company had a positive year overall, with annual sales increasing from $2 billion to $2.2 billion for the year and net income increasing from $116.9 million to $161.4 million. Full-year diluted earnings per share was $2.56 -- up from $1.87 the previous year.

"Their fourth quarter was surprisingly strong when you look at the local currency growth they had," said Amy Greene, an analyst who covers Tupperware for Avondale Partners.

In a statement, CEO Rick Goings said, "We were pleased to hold our own in the fourth quarter in light of the difficult external environment."

International sales make up the vast majority of Tupperware's business.

In developing nations, its direct-selling business model faces less competition because those countries have fewer retail outlets, there has not been as much market penetration and women have relatively few employment opportunities, meaning more of them are potential recruits into Tupperware's sales force.

Tupperware sales in the U.S. and Canada showed a 2 percent increase for the quarter. The company also said business was up 2 percent for the year in the U.S. and Canada.

What happens to those sales remains to be seen. On the one hand, Tupperware is poised to benefit from an increased recruiting pool as unemployment rises. And people forgoing restaurant meals because of the economy could be willing to invest in Tupperware's products.

"The trick is you have more people out selling the product, [but] sometimes it's harder to find the people to buy the product," Greene said. "It's too early to see how that plays out."

Tupperware hopes to sell its lunch containers to workers who are giving up restaurant meals because of the economy.

"This really does relate to more people brown bagging their lunch," Goings said in an interview earlier this week. "You also go for value for money during these periods of time."

One disadvantage Tupperware has is its price when compared to other products such as disposable containers. Tupperware's selling points, however, include a lifetime guarantee, bright colors and futuristic designs.

Tupperware has generally stayed away from discounting, Goings said, because "it hurts brands being known as discounted."

Larger decreases in company sales were in Germany, its "BeautiControl" line of makeup and skin-care products and Tupperware Japan.

BeautiControl has had "leadership issues," Goings said.

A new president came on board last month -- Albert Bosch, a former Tupperware managing director in Mexico who "understands the business building approach," Greene said.